MODEL BILLS

Living Wage Act

Summary: The Living Wage Act requires that government contractors provide their employees with reasonable wages and benefits.

SECTION 1. SHORT TITLE

This Act shall be called the “Living Wage Act.”

SECTION 2. FINDINGS AND PURPOSE

(A) FINDINGS – The legislature finds that:

1. [Jurisdiction] awards contracts that result in the employment of thousands of individuals. Many of these individuals, employed indirectly by the state, receive sub-poverty level wages.

2. The creation or promotion of jobs that pay sub-poverty level wages is shortsighted economic and social policy. Such jobs do not lead to a self-sufficient workforce or support sustainable community development. Instead, they increase the need for government services, such as public assistance for food, housing, health care, and child care.

3. The government is not an innocent bystander in the payment of sub-poverty level wages. It is necessary and appropriate to require that contractors working on government business pay at least a living wage.

(B) PURPOSE – Recognizing that the government is a major contractor for services, this law is enacted to increase the wages of service employees who indirectly work for the government in order to improve public health and welfare, promote the economic strength of our society, and take pressure off social service programs.

SECTION 3. LIVING WAGE

After section XXX, the following new section XXX shall be inserted:

(A) DEFINITIONS – In this section:

1. “Secretary” means the Secretary of the Department of [LABOR], or the Secretary’s designee(s).

2. “Government” means the state or a principal unit of state government.

3. “Government contractor” means a for-profit or not-for-profit entity that has a government contract.

4. “Government contract” means:

a. A contract for services with the government valued at $100,000 or more; or

b. A subcontract valued at $25,000 or more for providing part or all of the services covered by another entity’s contract for services with the government valued at $100,000 or more.

(B) PAYMENT OF LIVING WAGE

1. Any government contract for services must require government contractors to pay an hourly wage rate that is at least the living wage.

2. During the duration of a government contract, a government contractor shall pay to each employee who is working on the government contract an hourly wage rate that is at least the living wage.

3. If a government contract is subject to prevailing wage requirements under [appropriate citation], the government contractor shall pay the living wage or the prevailing wage, whichever is higher.

(C) CALCULATION OF LIVING WAGE

1. The initial living wage shall be $15 per hour.

2. On July 1 of each year, the Secretary shall adjust the living wage in direct proportion to any increase or decrease in the Consumer Price Index for [insert region], as reported by the U.S. Department of Labor, except that the hourly wage rate shall not be set at less than $15 per hour.

(D) WAIVERS AND EXEMPTIONS

1. A not-for-profit entity that is subject to this section may apply to the government agency that is responsible for the government contract for a waiver of the living wage requirement, based on economic hardship. The government agency may only grant such a waiver after:

a. A review of the not-for-profit entity’s financial situation, including salary levels of the entity’s management personnel; and

b. A determination that the application of this section would cause an undue hardship to the entity’s operation.

2. Any granted waiver of the living wage requirement must be renewed annually.

3. The living wage does not apply to a trainee who is enrolled for less than six months in a job readiness or job training program run by a non-profit entity.

[Bill drafting note: Paragraphs 1, 2 and 3 above are optional.]

4. If a government agency responsible for a government contract determines that application of this section would conflict with a federal program requirement, this section does not apply to that contract.

(E) ENFORCEMENT

1. No government contractor shall discharge, demote, harass or otherwise take adverse actions against any individual because such individual seeks to enforce this section, or testifies, assists, or participates in any manner in an investigation, hearing, or other proceeding to enforce this section.

2. No government contractor shall split or subdivide a contract, pay an employee through a third party, or treat an employee as a subcontractor or independent contractor to avoid payment of a living wage.

3. This section shall be enforced by [appropriate agency], which shall promulgate such regulations as are necessary to implement and administer compliance. Regulations shall include procedures to receive, investigate, and attempt to resolve complaints; and bring actions in any court of competent jurisdiction to recover appropriate relief for aggrieved employees.

4. In any action under this section in which an employee prevails:

a. The employee shall be awarded monetary relief, including back pay in an amount equal to the difference between the employee’s actual earnings and what the employee would have earned but for the employer’s unlawful practices.

b. The employer shall be enjoined from continuing to underpay employees, and the employer may be ordered to take such additional affirmative steps as are necessary, to ensure compliance with this section.

c. The employer shall pay a reasonable attorney’s fee, reasonable expert witness fees, and other costs of the action.

SECTION 4. EFFECTIVE DATE

This Act shall take effect on July 1, 20XX. The living wage shall apply to government contracts executed or renewed on or after October 1, 20XX.